PokerStars Bids for Atlantic City Casino
Online poker site PokerStars was last month rumored to be interested in purchasing a land-based casino in Atlantic City, the Atlantic Club Casino Hotel. News broke this week that PokerStars is moving forward with its bid to acquire the property, and has submitted an application to New Jersey state gambling regulators to take over operation of the struggling resort.
PokerStars, whose parent company, Rational Group US Holdings, also controls Full Tilt Poker, reached a purchase agreement with the Atlantic Club’s current owners, Colony Capital LLC, back on December 21. The purchase price has not been disclosed, though previous reports have put the figure to be below $50 million.
The Atlantic Club enjoys a long history in Atlantic City, New Jersey’s struggling gaming mecca, dating back to 1980, when it was constructed by a partnership between Michael R. Milken and the Golden Nugget. At the time, Steve Wynn was with the Golden Nugget and oversaw the construction of the Atlantic Club, which grew to become Atlantic City’s most profitable casino property by the early 1980s.
Unfortunately time has not been so kind to The Atlantic Club, which has deteriorated in recent years and last year underwent a rebranding to become a locals-only casino, adopting the not-so-glamourous motto of “a casino for the rest of us.”
In its application, parent company Rational Holdings said, “Rational US is a willing and enthusiastic prospective purchaser, and it intends to improve the financial viability of the property, and therefore the offerings available in Atlantic City. The purchase will improve the overall economic and competitive conditions of Atlantic City and the state of New Jersey, as the current owner of the company has, for a considerable period of time, been marketing the property for sale.”
PokerStars, the world’s largest online poker website, hopes to revitalize the property while bringing jobs Atlantic City, a city that has seen its gambling revenue decline for six straight years. PokerStars is said to have 50 million registered users on its site.
Rational is currently pursuing an interim casino license from New Jersey, and would then need to be greenlighted by the New Jersey Casino Control Commission before the acquisition deal could be finalized.
Pressure from casinos in neighboring states has been among the forces contributing to the revenue decline in Atlantic City. Late last year New Jersey lawmakers passed an Internet gambling bill that would not only allow for PokerStars to take over the Atlantic Club, but would also clear the way for a variety of other types of online wagering, including casino games and sports betting.
Governor Chris Christie has yet to sign the bill, and has until the 15th of February to act on the legislation. As part of the law, the operators of gambling websites would be required to physically locate their servers within the city of Atlantic City.
PokerStars made headlines last summer when it struck a $547 million deal with the federal government to acquire former rival poker site Full Tilt, a site that was shut down by the US Department of Justice in April of 2011 amid accusations that it was operating a glorified Ponzi scheme.
After the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, it became a federal crime to conduct gambling-related financial transactions via the Internet. As part of its deal with the government, PokerStars admitted no wrongdoing and will not be barred from entering the New Jersey market should Christie sign the gambling bill.
Check this space in the coming weeks for continued coverage of this story and other news related to land-based casino development as well as news relating to Internet poker and gambling in the United States.